Blog: G20 Summit - A Step Forward for Global Economic Stability
The G20 New Delhi Leaders” Declaration addresses the challenges posed by cascading economic crises and outlines measures to support private sector growth, enhance MSME integration in global trade, and promote skill development and financial inclusion across countries. Prime Minister Narendra Modi have already announced the consensus on the New Delhi Declaration within the G20 and its adoption.
The declaration recognises the impact of cascading crises on long-term growth and emphasises the need for well-calibrated macroeconomic and structural policies to boost growth while protecting vulnerable populations. This approach aims to resolve the cost-of-living crisis and foster strong, sustainable, balanced, and inclusive growth.
Global economic growth is noted to be below its long-run average and remains uneven, with expectations of further challenges soon. Tightening global financial conditions, potential debt vulnerabilities, persistent inflation, and geoeconomic tensions contribute to the risks.
The declaration acknowledges swift actions taken by some developed economies in response to recent banking turmoil and welcomes examinations by entities like the Financial Stability Board (FSB) and Standard Setting Bodies (SSBs) to draw lessons from these experiences.
India”s efforts to promote Digital Public Infrastructure (DPI) for financial inclusion and service delivery are mentioned, along with plans to make DPI technology available for interested countries. The G20 declaration recognises the presence of successive economic crises that present obstacles to sustained growth. It outlines a framework for the establishment, implementation, and oversight of digital public infrastructure.
The G20 countries commit to ensuring that multilateral development banks (MDBs), including the IMF and World Bank, are sufficiently capitalised to assist countries in need. This commitment is expected to provide an additional $200 billion in loans over the next decade.
The G20 calls for expedited resolution of debt distress among smaller economies burdened with high levels of indebtedness due to the COVID-19 pandemic, aligning with India”s priorities.
Regarding cryptocurrency regulation, the G20 leaders welcome a synthesis paper by the IMF and FSB outlining cryptocurrency risks and a regulatory roadmap. Discussion of the paper”s recommendations is slated for the G20 Finance Ministers and Central Bank Governors meeting in October. One key recommendation is against granting cryptocurrencies the status of official currencies or legal tender.
(Disclaimer: The views and the details expressed above are the writer’s analysis.)
